Before the Public Utilities Commission of the State of California Filed 03/12/21 04:59 Pm

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA FILED 03/12/21 04:59 PM

Order Instituting Rulemaking to Oversee the Resource Adequacy Program, Consider Program Refinements, and Establish Forward Rulemaking 19-11-009 (Filed November 7, 2019) Resource Adequacy Procurement Obligations.

THE PROTECT OUR COMMUNITIES FOUNDATION COMMENTS ON TRACK 3B RESOURCE ADEQUACY PROPOSALS

Bill Powers, P.E. Technical Advisor

Tyson Siegele Energy Analyst

Protect Our Communities Foundation 4452 Park Boulevard, #309 San Diego, CA 92116 [email protected]

Dated: March 12, 2021

1 / 12 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

THE PROTECT OUR COMMUNITIES FOUNDATION COMMENTS ON TRACK 3B RESOURCE ADEQUACY PROPOSALS

The Protect Our Communities Foundation (“PCF”) submits these comments in accordance with the Assigned Commissioner’s Amended Track 3B And Track 4 Scoping Memo

And Ruling issued on December 11, 2020.1 PCF recommends that the Commission reject the

California Independent System Operator’s (“CAISO”) Resource Adequacy Import Requirements

proposal, CAISO’s 17.5% Planning Reserve Margin proposal, and CAISO’s Unforced Capacity

proposal.

I. PCF RECOMMENDS THAT THE COMMISSION REJECT CAISO PROPOSAL 1 - NEW IMPORT REQUIREMENTS The CAISO Proposal 1, “Resource Adequacy Import Requirements,” places new

requirements on RA imports.2 The CAISO states that:3

[T]he Commission should require that its LSEs procure only resource adequacy imports that provide: (1) source and balancing authority area specification, (2) an attestation the import is committed solely to the CAISO, (3) minimum

1 R.19-11-009, Assigned Commissioner’s Amended Track 3B and Track 4 Scoping Memo and Ruling (“Ruling”), (December 11, 2020). 2 Track 3B.1 Proposals of The California Independent System Operator Corporation, (January 28, 2021), p. 6. 3 Ibid. 1

2 / 12 transmission service delivery requirements, and (4) availability to meet a 24x7 must offer obligation.

The CAISO’s proposal appears to be premised on the idea that import shortfalls were a

primary cause of the August 2020 blackouts. That is not the case. CAISO would have met its

forecast import assumption for the 2020 summer peak on August 14-15, 2020 but for allowing

exports during peak conditions.

At the time of the August 14, 2020 blackout, net imports were at about 7,100 MW and exports were at 3,500 MW.4 Gross imports were therefore at 10,600 MW.5 At the time of the

August 15, 2020 blackout, net imports were at about 5,900 MW and exports were at 3,500 MW.6

Gross imports were therefore at 9,400 MW.7

CAISO had projected a base case net import level of 10,500 MW and a sensitivity level

of 8,800 MW in its 2020 Summer Loads and Resources Assessment.8 But for 3,500 MW of

exports that CAISO permitted to occur as it initiated rolling blackouts in August 14th and 15th,

the imports into CAISO at the peak would have been the expected range that CAISO had

projected for the 2020 summer peak.

Transmission congestion on import pathways was not depressing imports-exports below

the range that CAISO had forecast for the 2020 summer peak when CAISO initiated blackouts

on August 14-15, 2020. The availability of transmission capacity was not a substantial factor in

creating the tight supply conditions. The primary causal factors were the favoring of exports over

CAISO load at the peak and the high outage rates among generation resources that should have

4 CAISO Daily Outlook, Supply, August 14, 2020, net imports = 7,126 MW at 6:35 pm; and Final Root Cause Analysis (FRCA), January 13, 2021, Figure B.36: Total Day-Ahead Scheduled Exports by Category, p. 122. 5 Gross imports = net imports + exports = 7,126 MW + 3,500 MW = 10,626 MW. 6 CAISO Daily Outlook, Supply, August 15, 2020; and FRCA, Figure B.36, p. 122. 7 Gross imports = net imports + exports = 5,927 MW + 3,500 MW = 9,427 MW. 8 CAISO, 2020 Summer Loads and Resources Assessment, Figure 1, p. 4, May 15, 2020. 2

3 / 12 been available at the peak. CAISO Proposal 1 will not resolve the primary problem that led to the

blackouts and should be rejected by the Commission.

The primary problem was allowing large amounts of exports out of CAISO at peak

demand conditions. As the Energy Division correctly points-out:9

The RA construct is meant to assure that the CAISO system has sufficient resources to meet demand, but an RA-only construct does not work if these RA resources flow to the highest bidder and out of the state during reliability events – it seems that only surplus should be exported, consistent with practices for other balancing authorities.

Exports must be constrained or curtailed under tight supply conditions to minimize the potential

for a repeat of what occurred on August 14-15, 2020. Firming imports without curtailing exports

will not necessarily result in an increase in net imports during reliability events.

The CAISO’s Department of Market Monitoring (DMM) also made clear, in the aftermath of the August 14-15, 2020 blackouts, that it was unaware that continuing exports during tight supply conditions was CAISO’s practice, and clarified that this preferential

treatment of exports was inconsistent with the practices of other balancing authorities during

reliability events.10

Prior to the August heat wave, the CAISO tariff and business practice manuals described day-ahead market exports not supported by specific generation being clearly prioritized below CAISO load in real-time. Therefore, it was DMM’s understanding that CAISO already had such a carefully defined process in place. Now, it is DMM’s understanding that CAISO may not have such a procedure and that its policy may not be aligned with export curtailment policies of other western balancing areas. As a result, DMM recommends a much more detailed discussion of this very important issue which includes balancing areas across the west, with a goal of establishing equal treatment and expectations of exports by all balancing areas.

9 R.19-11-009, M. Kito - Energy Division, Further Detail Regarding a Proposed Bid Cap to be Incorporated into the RA Construct, Workshop (February 10, 2021), p. 6. 10 CAISO DMM, Report on system and market conditions, issues and performance: August and September 2020, November 24, 2020, p. 71. 3

4 / 12 PCF recommends that the Commission reject CAISO’s proposal to require RA imports

be from specific sources with firm transmission capacity for delivery to CAISO. This proposal

will impose additional and unnecessary costs on California utility customers. Greater reliability can be secured at less cost to ratepayers by curtailing exports during peak demand conditions.

II. PCF RECOMMENDS REJECTION OF CAISO’S PROPOSAL 4, THE ADOPTION OF A 17.5% PLANNING RESERVE MARGIN

The Commission should reject CAISO’s Proposal 4, to increase the planning reserve

margin (“PRM”) to 17.5 percent in the June – October 2021 period.11 CAISO attempts to justify

the proposed 17.5 percent figure in part on the inappropriate use by CAISO of a nationwide

average forced outage rate for a nationwide composite of generator types. Forced outage data for

the generator populations in the CAISO control area should been used. CAISO and the

Commission also have the regulatory power to reduce forced outage rates further by rigorous

oversight of generator O&M practices.

Public Utilities Code section 761.3 mandates an active Commission oversight role for

California-based generation resources: 12

[T]he commission shall implement and enforce standards for the maintenance and operation of facilities for the generation of electricity owned by an electrical corporation or located in the state to ensure their reliable operation. The commission shall enforce the protocols for the scheduling of powerplant outages of the Independent System Operator.

Just as the Commission updated the requirements for non-resource-specific imports in

D.20-06-028 in order to assure RA contracts result in generators supplying energy as expected, the Commission should review and update its enforcement standards over maintenance and

11 Track 3B.1 Proposals of The California Independent System Operator Corporation, (January 28, 2021), p. 27. 12 Public Utilities Code § 761.3(a). 4

5 / 12 operations to assure power plant operation during peak demand hours in compliance with

Section 761.3.

California Public Utilities Code 761.3 requires generators to report the reasons for any

unit curtailments. Section 761.3 requires:13

Each entity that owns or operates an electric generating unit in California with a rated maximum capacity of 10 megawatts or greater, shall provide a monthly report to the Independent System Operator that identifies any periods during the preceding month when the unit was unavailable to produce electricity or was available only at reduced capacity. The report shall identify the reasons for any such unscheduled unavailability or reduced capacity. The Independent System Operator shall immediately transmit the information to the Oversight Board and the commission. Yet CAISO has declined to provide the reasons for the outages of the SoCal OTC units that were unavailable on August 14-15, 2020.14

Over 1,400 MW of Southern California’s once-through-cooling (“OTC”) capacity, nearly

40% of total Southern California OTC capacity, was unavailable when the 1,000 MW rolling

blackout was initiated by CAISO on August 14th.15 In contrast, all of that OTC capacity was

available to meet the substantially higher peak demand on September 6, 2020, increasing OTC

supply by over 1,000 MW. As a critical priority, the Commission must examine and understand

why the OTC units and other generators could not perform on August 14-15 and why they could

perform on September 6th. A 40% unavailability rate at the hour of critical need is clearly

unacceptable.

13 Public Utilities Code § 761.3(e). 14 CAISO response to PCF data request PCF-CAISO-2020RA-04, Attachment A. 15 R.20-11-003, PCF Opening Comments (November 30, 2020), Attachment A, pdf p. 14, (SoCal OTC capacity online, 6 pm, August 14, 2020 = 2,315 MW. NQC capacity of SoCal OTC units (9 total) = 3,733 MW. Capacity not available = 3,733 MW – 2,315 MW = 1,418 MW. Percentage of SoCal OTC capacity not available = 1,415 MW ÷ 3,733 MW = 0.38 = 38%.) 5

6 / 12 CAISO identifies the nationwide average forced outage rate for units of all types, using

the Weighted Effective Forced Outage Rate (“EFOR”) metric,16 as 7.2 percent as the basis for

advocating the Commission assume a 7.5 percent outage rate at peak load.17 It is the increase in

the assumed outage rate to 7.5 percent, from the current assumption of 5 percent, that increases

the PRM from 15 percent to 17.5 percent.18 The forced outage statistic upon which CAISO

relies, however, is a nationwide average for all types of non-renewable power plants, including

coal-fired power plants, and not the limited subset of the nationwide power plant fleet relied upon by CAISO. There are no coal plants in the CAISO control area.

The EFOR is the wrong metric to use in any case. The EFOR is the percentage of time a

unit is in forced outage over its entire scheduled operating time.19 The forced outage rate that

matters for summer heat waves is the forced outage rate during the afternoon peak demand

period. That metric is the EFOR - Demand, or EFORd.20 The EFORd is consistently lower than

the EFOR for all generation types.21

The dominant form of non-renewable generation in CAISO is natural gas combined-cycle and cogeneration power plants, with approximately 18,000 MW of capacity in CAISO’s 2021

Net Qualifying Capacity List.22 Combined cycle plants had a nationwide average EFORd of

16 R.20-11-003, Opening Testimony of Jeff Billinton on Behalf of the California Independent System Operator Corporation, January 11, 2021, p. 4. 17 Ibid, p. 4. 18 Ibid, pp. 3-4. 19 G.M. Curley - Generation Consulting Services, LLC, Reliability Analysis of Power Plant Unit Outage Problems, 2013, p. 33: https://www.cw-connect.com/sites/default/files/2020- 01/Reliability_Analysis_of_Power_Plant_Unit_Outage_Problems_2013.pdf. “EFOR = The percent of scheduled operating time that a unit is out of service due to unexpected problems or failures AND cannot reach full capability due to forced component or equipment failures.” 20 Ibid, p. 38. “EFORd will allow you to measure the probability of a forced event during demand times.” 21 NERC, 2019 Generating Unit Statistical Brochure 2 – All Units Reporting, September 15, 2020 (xls spreadsheet): https://www.nerc.com/pa/RAPA/gads/Pages/Reports.aspx. 22 R.19-11-009, CAISO, Response of the California Independent System Operator Corporation to Data Request Number PCF-CAISO-2020RA-02 by Protect Our Communities Foundation (November 16, 2020), December 10, 2020, p. 3. 6

7 / 12 3.69 percent in 2019,23 less than half the 7.5 percent forced outage rate proposed for use by

CAISO in the summer of 2021. Yet two of five IOU-owned combined cycle plants, totaling 40 percent of all of the IOU-owned plants, were experiencing substantial partial forced curtailments during the rolling blackouts on August 14-15, 2020. The CAISO does not address in the FRCA the reasons for these combined cycle plant outages.

Gas-fired utility boilers with nameplate capacity between 800 MW and 999 MW, like

806 MW Unit 1 and 806 MW Unit 2 at Ormond Beach, had an EFORd of 3.01 percent in 2019.24

Yet the forced outage rate at Ormond Beach on August 14th was 50 percent, with Ormond Beach

Unit 1 in full forced outage at the time of the blackout.

Nuclear plants had a nationwide average forced outage rate of 2.06 percent in 2019.25

There is one nuclear plant in the CAISO control area, the 2,280 MW Diablo Canyon.

The non-renewable dispatchable power supply in the CAISO control area is dominated

by combined cycle power plants, nuclear, and large gas-fired OTC utility boilers. Collectively

these units, on an average nationwide basis, had a 2019 forced outage rate of approximately 3

percent. Combustion turbines had a higher forced outage rate in 2019 than the other non-

renewable supply sources, about 10 percent,26 though they make up a relatively small portion of

the non-renewable supply in the CAISO resource portfolio. Given the resource mix in California,

the current assumption by the Commission of a 5 percent outage rate is reasonable and

appropriate.27 Moreover, the forced outage rate can be further reduced by requiring best

23 NERC, 2019 Generating Unit Statistical Brochure 2 – All Units Reporting, September 15, 2020 (xls spreadsheet), 24 Ibid. 25 Ibid. 26 Ibid. 27 R.20-11-003, Opening Testimony of Jeff Billinton on Behalf of the California Independent System Operator Corporation, January 11, 2021, p. 3. 7

8 / 12 maintenance practices in the CAISO control area and not simply by assuming that national

average outage rates are sufficient.

Given the 2019 EFORd data, it is not unreasonable to expect that there would have been no curtailments during the August 2020 heat wave among the OTC units and the IOU-owned combined cycle units. To have 5 of 14 of these units in full or partial curtailment on August 14th,

and 4 of 14 units in full or partial curtailment on August 15th, demands an in-depth review of operations and maintenance practices, not a seasonal increase in the PRM to 17.5 percent.

Finally, the increase in the assumed forced outage rate to 7.5 percent requested by

CAISO would gloss over operational and dispatch deficiencies that should be rectified and not ignored. Specifically, the inexplicable scheduling coordinator instruction to the Panoche 400

MW combustion turbine power plant to reduce output by 248 MW at 6:13 pm on August 15th, 15

minutes before CAISO initiated a 470 MW rolling blackout at 6:28 pm, materially tipped the

balance that led to that blackout.28 The scheduling coordinator for Panoche is PG&E.29 The units

at Panoche are extremely fast LMS100 gas turbines, that could have recovered the entire 248

MW load drop in one minute or less.30 The FRCA include no information about when Panoche

was instructed by CAISO to reverse the erroneous curtailment.

The Commission should reject CAISO Proposal 4 to increase the PRM to 17.5 percent

for the June – October 2021 period. The Commission should instead determine: 1) why the

Southern California OTC units and the IOU-owned combined cycle units experienced such high

28 A precipitous decline in imports also began at 6:25 pm, with imports declining from 5,920 MW at 6:25 pm to 5,247 MW at 6:35 pm, a nearly 700 MW reduction in 10 minutes. See CAISO Today’s Outlook, Supply, Supply Trend, August 15, 2020: http://www.caiso.com/TodaysOutlook/Pages/supply.html. 29 Court of Appeal, First District, Division 4, California, Panoche Energy Center, LLC, Plaintiff and Respondent, v. Pacific Gas and Electric Company, Defendant and Appellant, A140000, July 1, 2016: https://caselaw.findlaw.com/ca-court-of-appeal/1740779.html. 30 GE, LMS100 Power Plants (brochure), November 2018: https://www.ge.com/content/dam/gepower- pgdp/global/en_US/documents/product/gas%20turbines/Fact%20Sheet/2018-prod- specs/GEA32933A%20LMS100_Power_Plants_R2.pdf. 8

9 / 12 forced outage rates as the heat wave bore down on California in mid-August 2020, 2) why the erroneous dispatch instruction was not immediately reversed, and 3) whether to recommend remedial O&M and dispatch protocols be instituted by CAISO to assure much higher availability of these units during summer 2021 peak demand periods.

III. PCF RECOMMENDS REJECTION OF CAISO’S TRACK 3B.2 UCAP PROPOSAL

CAISO’s UCAP Proposal should be rejected by the Commission. The UCAP proposal presumes that CAISO and the Commission are passive observers of generator outage rates, and limits its oversight role to documenting these outage rates and discounting NQCs based on the observed outage rates. The UCAP Proposal does not contemplate that the generator owner/operators: 1) may not be taking the steps necessary to assure that the generators are available during tight supply conditions, or 2) may be scheduling planned outages at times when tight supply conditions could potentially occur.

CAISO has shown no interest in understanding the causes of the high outage rates of these units on August 14-15, 2020. One cause – planned outages during the summer peak load season – has an obvious solution. Planned outages must be prohibited during the July 1 –

October 1 period when peak loads historically occur in the CAISO control area. Prohibiting planned outages during periods of hot weather and high demand would ensure increased supply when California needs that supply the most. Prudent practice and common sense requires all generation to be ready to run at times of when high demand can occur –the summer and fall in

California. Thus, 336 MW Alamitos (OTC) Unit 4 should not have been in a planned outage in

10 / 12 mid-August 2020, but it was.31 Having this one unit online on August 15, 2020 would have

largely offset the magnitude of the 470 MW rolling blackout ordered by CAISO on that day.

Regarding forced outages, CAISO has exhibited no curiosity regarding the root causes of

the numerous total and partial forced outages among OTC units and IOU-owned combined cycle plants on August 14-15, 2020. CAISO maintains an obligation under Pub. Util. Code § 761.3(e) to investigate the causes of these forced outages.32 These total and partial forced outages include

Redondo Beach Unit 5, Ormond Beach Unit 1, Gateway combined-cycle (partial), and Desert

Star combined cycle (partial).

PCF issued data requests to CAISO in this proceeding asking for the specific reasons that

Redondo Beach Unit 5 and Ormond Beach Unit 1 were in forced outage on August 14, 2020.

Regarding the root cause(s) of these curtailments, the CAISO response was the same:33

The data requested at the individual resource level is not relevant to the CPUC RA program. The “specific problem(s)” that lead to an individual unit forced outage are not relevant to the CPUC RA proceeding. The CAISO requests that PCF explain why this information should come from the CAISO rather than the unit owner, which is in better position to provide a detailed response.

First, data on plant outages is directly relevant to the RA proceeding – and to this

proceeding – because the CAISO’s only proposed remedy to prevent future blackouts involves

asking the Commission to increase the reserve margin for this summer and to order additional

procurement. Second, CAISO is mistaken that it has no responsibility to investigate the causes of

forced outages. Pub. Util. Code § 761.3(e) requires that CAISO identify the causes of the forced

31 R.19-11-009, CAISO, Response of the California Independent System Operator Corporation to Data Request Number PCF-CAISO-2020RA-02 by Protect Our Communities Foundation (October 12, 2020), November 16, 2020, p. 3. 32 Pub. Util. Code § 761.3(e). 33 R.19-11-009, CAISO, Response of the California Independent System Operator Corporation to Data Request Number PCF-CAISO-2020RA-02 by Protect Our Communities Foundation (October 12, 2020), November 16, 2020, p. 3. 10

11 / 12 outages and immediately communicate that information to the Commission once it is received.34

The UCAP Proposal is not a reasonable solution to the unacceptably high outage rates

experienced by OTC and IOU-owned combined cycle units on August 14-15, 2020.

IV. CONCLUSION

For the reasons stated above, the Commission should reject CAISO’s Resource Adequacy

Import Requirements proposal, CAISO’s 17.5% Planning Reserve Margin proposal, and

CAISO’s Unforced Capacity proposal.

Respectfully submitted, /s/ Bill Powers

Bill Powers, P.E. - Technical Advisor Protect Our Communities Foundation 4452 Park Boulevard, #309 San Diego, CA 92116 Phone: 619-693-4788 [email protected]

Dated: March 12, 2021

34 R.20-11-003, Opening Testimony of Bill Powers, P.E. on Behalf of Protect Our Communities Foundation, January 11, 2021, p. 9, footnote 25. 11